3. Distinct Context:
Unlike the iPhone, Netflix has entered existing markets and upended them without much "confetti about cool". It's almost like a B2B company in a B2C market.

What does Netflix mean for Other Organizations?Netflix continued to invest in streaming capability for many years, before launching the product. This demonstrates a long term thinking about its business and its markets.

How does an organization connect
a. investing in long term capabilities, and,
b. thinking about markets,
In hindsight, all of this is as easy as pie. Lets look at the challenges.

Challenges with Making the Organizational Connections:

Let's take two cases within two functions in an organization.

1. Finance:
Say you are a business finance manager, and a business manager comes over to you about a prototype he would like to acquire and integrate into the company's product and marketing portfolio. How do you not only help him acquire the prototype, but also give him the leeway to invest time and resources toward patiently integrating an early stage startup product into a reliable portfolio asset at the company?

2. Marketing:
As a marketing manager, say, you realize you need an organization wide communication and analytics sharing capability to meet the product and competitive environment in the medium term. What kind of marketing programs, and in what prioritized order, do you push, to deliver phased, sustained capabilities to your organization over the medium term?

Suddenly, this doesn't look all that easy, does it?

For managers battling to get things done within their silos on a daily basis, these are not easy questions to answer. Thinking about this gives you the scale of the effort that an organization needs to put into developing capabilities that impact its markets.

Friday, March 18, 2011

Executive Summary: Netflix has been lauded for its ability to manage innovation, especially for its ability to translate innovation into real impact on its business. This post helps us think through some of the market possibilities it can target. From the Desk of "Is it a bird? Is it a plane? Its a... Jedi mind trick!"

The news reminded me of a curveball I recently threw to some very bright folks: Will Netflix get into running movie theaters (or atleast renting them out temporarily)?

What Does The Question Mean?

The folks found the question interesting enough to pause to think it through. This is not because they did not have a (what may seem like an obvious) ready answer, but because it should, and apparently did, make you think about Netflix's context and how it is disrupting the context around it.To rephrase:1. Can Neflix groupon its at-home viewers into a high quality, custom generated "in theater" experience?2. Can Netflix be vertically integrated in a niche market, while still serving what is currently its core market?

All in all, how do these ideas impact its profitability and its margins? At worst, can a capability to pursue the option posed in the question be a useful negotiation tool?

To dig a little bit deeper:- What about Netflix's current position and capabilities (e.g. continued investment in innovation) provides it a competitive advantage?- As Netflix get to know more of its customers better, how can it leverage it's information better?

Structure Around the Question

Here are a couple of paths to making sense of this question on Netflix:- Content Development and Production -> Content Channels and Distribution -> Content ConsumptionOr the reverse:- Content Consumers and Markets -> Content Channels and Distribution -> Content Development and Production

Deep Dive Into The Market and The Consumer

Lets walk through the first way of looking through this process:A. Who is Neflix's core consumer? What market is Netflix targeting?

1. Viewers of TV and movie dvd like content "experience" at home with access to a mailbox and to an internet ready device?2. Viewers of video content "experience" at home with access to an internet ready device?3. Viewers of an entertainment "experience" anywhere with access to an internet ready device?4. Viewers of an entertainment "experience" with access to an internet ready device or with access to a specific location?

Now, you can define a spectrum of "experience" as well, from a streaming video "experience" on a small device while on the move, to a fixed location video "experience" of the IMAX or the "IFC Theater"/ "Indie Movies" sort. As for margins, isn't the IMAX share price hear its LTM high?

Now that you have some lightbulbs flashing in your mind, need I say more?

Saturday, March 5, 2011

Executive Summary: A quick check with *you* on your thoughts on media and ad spending in the US. The objective is two fold- identify what you believe are the factors driving the trends, and then seek your forecast for this trend.

Trend: Advertising Dollars

I attended a conference where a respected businessperson emphasized a trend in the media industry. Ad spend in online channels was not growing the overall pie in terms of dollars. Instead the online channels were cannibalizing other channels. So the question arises- is there a disssonance between the change in the size of the pie, its slices, and consumer/ end user relevance?

1. Are economic conditions factors in terms of the overall ad spend pie? How?2. Are demographic trends factors in the stagnation of the overall ad spend pie? If so, how do these trends play out in terms of the slices of the pie?

Marketing Teams as Factors in Ad Spend Shifts

I also noted some opinions a few years ago that the move of marketing dollars from traditional media to online media would be slow because of deep, embedded marketing and agency relationships, as well as marketer mind share.

Consumer/ End User Behavior

1. Has the user's behavior across the various marketing communication touch points, even with the addition of online media touch points, changed? 2. Has the user's reaction to these marketing communication touch points changed over time?

Now, there are enough "shops" around the world happy to rip apart an Apple product, and some can even put them back together. In fact, you could even classify them as a subculture. However, can Apple use these custom built white iPhone 4s a as marketing tactic?

Thursday, March 3, 2011

Executive Summary: Sometimes, the simplest things can be lost in the daily tactical maze. There have been a slew of statistics demonstrating that Android phones have been eating Apple's lunch over growth in marketshare. If you were Apple, how would you react to these market developments? With its product pipeline and brand dexterity, does Apple really care? From the Desk of Beatles-Were-Wise-With-Live-And-Let-Die.

... More: Think a simple 2x2 matrix covering- market penetration via existing and new products, adjacent market development via new and existing products, and entirely new markets via new products.

Here are some steps to aid the thinking process:1. Current Product for an Existing Marketing- iPhones: Apple smartly squeezed all it could through its relationship with ATT. Now, to seek increased market penetration, it partnered with Verizon. iPhones are still positioned as products that are a "cut above the rest", and continue to generate great margins for Apple.

The feature pipeline for the current iPhone product line is strong and Apple can expect to continue to dominate the market.

2. New Product for a New Market- iPads:Apple at the netbook's lunch. No other product is near the customer's utility curve (read conjoint analysis). With the iPad2, Apple widens the gap with competitor products, and safeguards its margins. However, would we say that the Android's smartphone market is a "new" market for Apple? Perhaps it needs a "new" product for this "new" market?

3. New Products for Existing Markets:Really? See point 1. Even better, Apple's strong brand and positioning with its existing product line is so much "gold" that it can practically launch what were traditionally new products under the guise of extensions of existing products.

4. Existing Products for New Markets:Make no mistake, the iPhone nano is a *new* product in the product development sense. However, in terms of messaging, the iPhone nano is brilliant in leveraging the consumer connection and premium positioning with the "nano" and pit it against "fancy-scmancy" andriod phones.

The Bottom Line

Now, the questions that remain:1. Internal Assessment: Do Apple's current financial position vis a vis its margins, and its future product margins trends, demand the iPhone nano launch?2. Competitive Assessment: What does the iPhone Nano launch do its competitors? You can't expect them to shrivel up and disappear. :-)

Tuesday, March 1, 2011

Executive Summary: You are a second ranked player in a hypercompetitive market. You learn, from an independent research house, that your customers are more likely to buy your products than your competitors customers are likely to repurchase theirs. What do you do? Do you utilize this in your marketing communication? From the Desk of A-Kick-in-the-Shins-Does-Not-Always-Save-Nine. :-)

The Statistics

While looking at statistics toward structuring a perspective on industry trends, I came across an interesting study on customer loyalty for smartphones, where, even though the iPhone outperformed Android phones in NPS (Net Promoter Score- a Bain methodology) metrics, (marginally) more Android users are likely to buy a similar device, compared to the number of iPhone users' likely to repurchase an iPhone.

Waiddaminute? Did you read that right?

The Communication Opportunity

Given the hypercompetitive smartphone market, you would think the Android marketer has hit the jackpot. You can imagine Google Android folks rushing to their agency with a new brief to launch the next multichannel campaign (broadcast, web, etc.) in no time.

You can even imagine a few briefs ("Android users keep coming back for more") and a few advertisements:1. Android user sees a store sign, "New Android Phone" and buys one, while iPhone users are shown getting their grip right for the iPhone, or,2. Android user gets another Android phone as a birthday or a Valentine's Day gift, "I always wanted another Android", or,3. Voice over wraps up with "Even when independent researchers praise the iPhone, they can't help but admit that more Android users are likely to buy another Android phone, than there are iPhone users willing to buy another iPhone."

... and many more!

Some Structure and Strategic Thought

The standard approach may be pretty simple in the abstract: Corporate Strategy -> Market Strategy -> Communications Strategy -> Portfolio of Communications Tactics. However, things aren't as straightforward in the "real world", are they?

If you were an Android marketer who finds this statistic, you would consider a few things, not necessarily in a top down, structured manner:

1. Source and quality of information:Is the source and quality of information firmly in your corner? Well, you'll take a firmly independent corner too, wouldn't you? It’s more than just checking if your competitor can throw a more effective/ damaging response with the same source of information.

2. Timeframe: Does this lead to a "multi-period game" over advertising where you do not win, or you have no first mover advantage, or both parties end up in an expensive stalemate with a negative outcome for you? Coke vs. Pepsi advertising is an example. Also, think about Pepsi stepping back from Superbowl advertising in 2010.

3. Communication Themes: What is Android's driving theme for the season or for the year? What is Android's multi-year communication and branding strategy? Does this drop in the ocean create ripples that turn in tsunamis, or should this drop be assimilated quietly using different tactics?

4. Portfolio of Tactics: Does the Android team have a portfolio of tactics aligned with its communication and branding strategy? Does the portfolio explicitly accept or reject this opportunity?

Digging into the DetailsLet’s dig into a couple of the items listed above.

Timeframe:

Lets take one question- Do you think there are season spanning advantages to pushing the message? Here are some hypothetical situations that elaborate upon this. Say, it's the holiday season, and Android launches the campaign based on this research. Does Android have time to make an impact on sales? Does Apple have time to respond right away and nullify the advantage? Can Apple hit back harder around the same theme at the next key sales period?

The Source and Quality of Information:

The study, using the Net Promoter Score methodology, declares that the iPhone outperforms others in user loyalty:

Given the number of iPhone users that have stuck through a lot of thin (network, antenna, cracked case, etc.) this should not be surprising. However, as you scroll past the Net Promoter Score based results of Mobile Platform Loyalty Ranking graph, and down to Repurchase Behavior graph, you would note an interesting result.

89% of Google Android customers would buy a similar device in the future. Compare this to 85% of iPhone customers being willing to by an iPhone in the future.

Huh?

Now, there are various perspectives to this:

The iPhone has set very high expectations and is doing a fantastic job keeping its user engaged.

Executive Summary: A light hearted look at the marketing tactics arising out of Groupon. No, I don't mean Groupon...zi. From the Mark Twain Desk of Funny Bones at the Jeffersonian.

Groupon wants my married friend to speed date! Really! Well, technically speaking, my married friend received a groupon for speed dating. I am sure you can see the humor in that. :-)

The smart folks would jump to thinking of this as a marketing, even statistical, error. However, this could well be the Jedi mind trick of the year so far- after the cool VW darth vader superbowl ad.

How? Here are some ideas...1. Don't your married friends keep setting you up with dates? Duh, right? You would think their persistence factor would beat any email spam marketing tool known to man, or woman.

2. Do you know what the divorce rate in the country is? This could well be a long term, relationship building strategy for a future target audience. Disclaimer: A bright, married friend suggested this when I put this up on Facebook, so don't shoot the messenger.

3. Its an error- my friend would be one of the few, or many, random, in error recipients of the sophisticated, targeted statistical model used for the promotion.

About Me

Communication. Ideas. Number crunching. Getting it all done. Unobtrusively.
Experience running a startup and large, strategic projects for Fortune 500 companies. Experienced in analytics, in building business products, in planning large programs and in building relationships to (you guessed right) get it done.